As ongoing turbulence drives a surge in private equity in the United States economy, many are encountering the realities of private equity firms’ impact on business partnerships. Just ask CedarCreek Systems, a Procure-to-Pay (P2P) technology reseller for clubs and resorts.
The company says it had a long-standing agreement with the P2P software company BirchStreet Systems to resell its tech to clubs and resorts, which ultimately helped CedarCreek Systems expand across the U.S. as well as internationally.
But after BirchStreet was acquired by Parthenon Capital–a private equity firm with offices in Boston, Austin and San Francisco–breaches in the agreement started taking place, according to CedarCreek’s founder and CEO Nicholas Wilhelm. CedarCreek has since filed a lawsuit, and the two firms will go to trial on June 9, 2025.
A CedarCreek press release says the alleged breaches include “arbitrary price increases, failure to provide agreed-upon rebates, the abdication of customer support responsibilities, and refusal to deliver core software functionality for CedarCreek and its customers,” despite CedarCreek claiming it continued to pay BirchStreet hundreds of thousands of dollars.
In addition, CedarCreek claims that BirchStreet attempted to poach its customers. “Recently, BirchStreet and Hilton Supply Management attempted to persuade one of our high-profile club clients to align directly with BirchStreet and Hilton Supply Management and end their relationship with CedarCreek. We will be adding an investigation of this latest violation to the discovery process,” said Wilhelm.
He continued, “Unfortunately, Parthenon appears to have prioritized short-term financial gains over the long-term health and reputation of BirchStreet, disregarding our decade-long partnership and all that it has meant for both companies’ success in the process.”
The company’s announcement also points out other developments tied to Parthenon following BirchStreet’s recent acquisition of ReactorNet Technologies, with reported layoffs taking place soon after. Wilhelm explains, “In a recent conversation with an unnamed resource within BirchStreet, I was informed that with the exception of staff reductions forced by Covid, BirchStreet had not implemented a reduction in force in its two-decade history prior to the Parthenon acquisition.”
CedarCreek Systems says it wants a fair resolution so they can continue serving their clients. “We are committed to upholding the terms of our agreement to meet our obligations to our customers and to maintain our reputation as a business,” said Wilhelm.
